Definition ∞ Third-Country Linkages refer to the financial or operational connections between entities within a regulated jurisdiction and those located outside that jurisdiction. These connections can introduce risks, such as money laundering or financial instability, from less regulated environments. For digital asset firms, these linkages involve cross-border interactions with various international service providers.
Context ∞ The discussion surrounding Third-Country Linkages in the digital asset sector often involves the challenges of extending regulatory oversight to global crypto operations. Regulators are presently examining how to mitigate risks posed by entities operating in jurisdictions with weaker anti-money laundering or prudential standards. Monitoring international cooperation agreements and regulatory harmonization efforts will offer insight into managing these cross-border risks effectively.
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